This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 20 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. This is the total amount borrowed: A) Interest. B) Principal. C) Investment. D) Maturity. Show Answer Correct Answer: B) Principal. 2. Why is using money as a medium of exchange preferable to bartering? A) The relative value of bartered goods remains the same over time. B) The value of bartered goods decreases after they are purchased. C) The relative value of goods is difficult to establish in a barter system. D) The value of money fluctuates over time. Show Answer Correct Answer: C) The relative value of goods is difficult to establish in a barter system. 3. Which of the following will most likely occur in an economy is more money is demanded than is supplied? A) The amount of investment spending will increase. B) Interest rates will decrease. C) Interest rates will increase. D) The demand curve for money will shift to the right. Show Answer Correct Answer: C) Interest rates will increase. 4. The cost of using money. A) Overdraft. B) Interest. C) Payment. D) Loan fee. Show Answer Correct Answer: B) Interest. 5. All of the following are considered liquid assets EXCEPT A) Traveler's checks. B) Money market mutual funds. C) Currency. D) Deposits in checking accounts. Show Answer Correct Answer: B) Money market mutual funds. 6. Certain information that Federal and State laws require creditors to give to borrowers relative to the terms of the credit extended. A) Disclosures. B) Loan application. C) Amortization. D) Fine print. Show Answer Correct Answer: A) Disclosures. 7. Expenses that do not change every month, such as rent A) Static Expenses. B) Variable Expenses. C) Never Change Expenses. D) Fixed Expenses. Show Answer Correct Answer: D) Fixed Expenses. 8. ..... is the rate at which commercial banks borrow short term funds from the central bank by selling their financial securities to the central bank A) Repo rate. B) CRR. C) Bank rate. D) SLR. Show Answer Correct Answer: A) Repo rate. 9. The progressive income tax is an example of ..... . A) An automatic stabilizer. B) An entitlement. C) Government dependency. D) Priming the pump. Show Answer Correct Answer: A) An automatic stabilizer. 10. The main advantage of diversification as an investment policy is that it A) Guarantees a fixed rate of return on an investment. B) Increases investors' access to their money. C) Reduces risk to investors. D) Offsets the effects of inflation on investments. Show Answer Correct Answer: C) Reduces risk to investors. 11. An advantage of savings accounts is ..... A) They provide interest for deposited money. B) Easy access to funds. C) No limits on withdrawns. D) None of above. Show Answer Correct Answer: A) They provide interest for deposited money. 12. Which is a good synonym for the word barter in the term barter economy? A) Fiat. B) Monetary. C) Specie. D) Trade. Show Answer Correct Answer: D) Trade. 13. What is an important characteristic of m1 money? A) Flexibility. B) Solidity. C) Durability. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 14. Who are co-operative banks owned by? A) Normal people. B) Government. C) RBI. D) Islamic bank. Show Answer Correct Answer: B) Government. 15. A reserve ratio is the: A) Proportion of cash and security reserves the bank needs to hold. B) Fraction of deposits that the bank is required to hold. C) Loan to deposit ratio in the bank's balance sheet. D) Money belonging to the bank's largest depositors. Show Answer Correct Answer: B) Fraction of deposits that the bank is required to hold. 16. Money put in a bank account is called a ..... and money taken out is called a ..... A) Batman and Robin. B) Deposit and Withdraw. C) Sponge bob and Patrick. D) Withdraw and direct deposit. Show Answer Correct Answer: B) Deposit and Withdraw. 17. This type of money is considered legal tender and gets its value from the people's faith in the government. A) Commodity money. B) Representative money. C) Fiat money. D) Gold standard. Show Answer Correct Answer: C) Fiat money. 18. A card that gives the holder an option to borrow money, usually at the point of sale. A) Debit card. B) Signature card. C) Credit card. D) Loan. Show Answer Correct Answer: C) Credit card. 19. Holds its value over a period of time A) Medium of Exchange. B) Money. C) Store of Value. D) Barter. Show Answer Correct Answer: C) Store of Value. 20. The National Banking Acts of 1863 and 64 gave the federal government power to do all of the following EXCEPT A) Charter banks. B) Require banks to hold gold and silver reserves to cover their bank notes. C) Seize the assets of any individual. D) Issue a single national currency. Show Answer Correct Answer: C) Seize the assets of any individual. 21. An adjustable rate mortgage in which the interest rate and payment may change over the life of the loan as market conditions change. A) Interest rate. B) APR. C) Principal. D) ARM. Show Answer Correct Answer: D) ARM. 22. Which of the following system is followed by RBI for issuing currency? A) Minimum reserve system. B) Proportionate system. C) Fixed fiduciary issue system. D) Simple deposit system. Show Answer Correct Answer: A) Minimum reserve system. 23. U.S. money today has value because the government has ordered it as acceptable means to pay debts. A) Representative money. B) Commodity money. C) Fiat money. D) Currency. Show Answer Correct Answer: C) Fiat money. 24. All of the following are basic components of bonds EXCEPT A) Coupon rate. B) Treasury bonds. C) Par value. D) Maturity. Show Answer Correct Answer: B) Treasury bonds. 25. When you retire at the age of sixty-five, you receive a(n) ..... from the government. A) Allowance. B) Fine. C) Pension. D) Grant. Show Answer Correct Answer: C) Pension. 26. What happens to a company's stock price when the compnany makes a profit? A) The stock price goes up. B) The stock price goes down. C) The stock price stays the same. D) The stock price goes in the same direction as the stock market. Show Answer Correct Answer: A) The stock price goes up. 27. In the U.S. free enterprise system one of the primary roles of the government is to: A) Guarantee that investors profits are secure. B) Ensure the safety of products through regulation. C) Provide new sources of funding for technology start ups. D) Employ a majority of the workforce. Show Answer Correct Answer: B) Ensure the safety of products through regulation. 28. What are liquid assets? A) Assets that are or that can easily become currency. B) Fluids, such as mercury, that were historically used as commodity money. C) Assets that flow from one type of bank account to another. D) Money that is counted in M2 but not in M1. Show Answer Correct Answer: A) Assets that are or that can easily become currency. 29. The main difficulty of a barter system is finding A) A form of money that both parties will accept. B) Two people who have what each other wants. C) A third party to evaluate the goods to be traded. D) Trade goods that will retain their value over time. Show Answer Correct Answer: B) Two people who have what each other wants. 30. The amount received in addition to the invested amount A) Share. B) Day Trading. C) Return. D) Stock. Show Answer Correct Answer: C) Return. ← PreviousNext →Related QuizzesFinance QuizzesMoney And Banking Quiz 1Money And Banking Quiz 2Money And Banking Quiz 3Money And Banking Quiz 4Money And Banking Quiz 5Money And Banking Quiz 6Money And Banking Quiz 7Money And Banking Quiz 8Money And Banking Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books